Bank Of Montreal (NYSE:BMO) and Shinhan Financial Group (NYSE:SHG) Head-To-Head Survey

Bank Of Montreal (NYSE:BMO) and Shinhan Financial Group (NYSE:SHG) are both large-cap finance companies, but which is the better investment? We will compare the two companies based on the strength of their analyst recommendations, valuation, profitability, dividends, earnings, institutional ownership and risk.

Risk and Volatility

Bank Of Montreal has a beta of 0.94, suggesting that its stock price is 6% less volatile than the S&P 500. Comparatively, Shinhan Financial Group has a beta of 0.97, suggesting that its stock price is 3% less volatile than the S&P 500.

Profitability

This table compares Bank Of Montreal and Shinhan Financial Group’s net margins, return on equity and return on assets.

	Net Margins	Return on Equity	Return on Assets
Bank Of Montreal	12.60%	13.04%	0.70%
Shinhan Financial Group	20.07%	11.02%	0.86%

Institutional & Insider Ownership

45.8% of Bank Of Montreal shares are owned by institutional investors. Comparatively, 7.8% of Shinhan Financial Group shares are owned by institutional investors. 1.0% of Bank Of Montreal shares are owned by insiders. Comparatively, 1.0% of Shinhan Financial Group shares are owned by insiders. Strong institutional ownership is an indication that large money managers, hedge funds and endowments believe a stock will outperform the market over the long term.

Dividends

Bank Of Montreal pays an annual dividend of $4.80 per share and has a dividend yield of 3.0%. Shinhan Financial Group pays an annual dividend of $1.86 per share and has a dividend yield of 2.9%. Bank Of Montreal pays out 51.0% of its earnings in the form of a dividend. Shinhan Financial Group pays out 20.2% of its earnings in the form of a dividend. Both companies have healthy payout ratios and should be able to cover their dividend payments with earnings for the next several years. Bank Of Montreal has increased its dividend for 4 consecutive years. Bank Of Montreal is clearly the better dividend stock, given its higher yield and longer track record of dividend growth.

Analyst Recommendations

This is a breakdown of current ratings for Bank Of Montreal and Shinhan Financial Group, as reported by MarketBeat.

	Sell Ratings	Hold Ratings	Buy Ratings	Strong Buy Ratings	Rating Score
Bank Of Montreal	1	8	4	0	2.23
Shinhan Financial Group	0	1	1	0	2.50

Bank Of Montreal presently has a consensus target price of $163.00, indicating a potential upside of 0.58%. Given Bank Of Montreal’s higher probable upside, equities research analysts plainly believe Bank Of Montreal is more favorable than Shinhan Financial Group.

Earnings & Valuation

This table compares Bank Of Montreal and Shinhan Financial Group”s gross revenue, earnings per share and valuation.

	Gross Revenue	Price/Sales Ratio	Net Income	Earnings Per Share	Price/Earnings Ratio
Bank Of Montreal	$55.92 billion	2.03	$6.22 billion	$9.42	17.20
Shinhan Financial Group	$23.83 billion	1.26	$3.48 billion	$9.21	6.85

Bank Of Montreal has higher revenue and earnings than Shinhan Financial Group. Shinhan Financial Group is trading at a lower price-to-earnings ratio than Bank Of Montreal, indicating that it is currently the more affordable of the two stocks.

Summary

Bank Of Montreal beats Shinhan Financial Group on 11 of the 16 factors compared between the two stocks.

About Bank Of Montreal

Bank of Montreal provides diversified financial services primarily in North America. It operates through Canadian P&C, U.S P&C, BMO Wealth Management, and BMO Capital Markets segments. The company’s personal banking products and services include deposits, mortgages, home lending, consumer credit, small business lending, credit cards, cash management, financial and investment advice, and other banking services; and commercial banking products and services comprise various of financing options and treasury and payment solutions, as well as risk management products. It also offers investing, banking, and wealth management advisory; digital investing services; financial solutions for individuals, families, and businesses; provides investment management services to institutional, retail, and high net worth investors; and diversified insurance, and wealth and pension de-risking solutions. In addition, the company provides individual life, critical illness and annuity products, as well as segregated funds, and group creditor and travel insurance to customers; debt and equity capital-raising, loan origination and syndication, balance sheet management, treasury management, mergers and acquisitions advice, restructurings and recapitalizations, trade finance, and risk mitigation services, as well as a range of banking and other operating services. Further, the company offers research and access to financial markets for institutional, corporate and retail clients through an integrated suite of sales and trading solutions related to debt, foreign exchange, interest rates, credit, equities, securitization, and commodities; provides new product development and origination services, as well as risk management and advisory services for hedging strategies, including in interest rates, foreign exchange rates and commodities prices; and funding and liquidity management services. The company was founded in 1817 and is headquartered in Montreal, Canada.

About Shinhan Financial Group

Shinhan Financial Group Co., Ltd. provides financial products and services in South Korea and internationally. The company operates through six segments: Banking, Credit Card, Securities, Insurance, Credit, and Others. It offers retail banking services, including demand, savings, and fixed deposit-taking; checking accounts; mortgage and home equity, and retail lending; electronic banking and automatic teller machines (ATM); and bill paying, payroll and check-cashing, currency exchange, and wire fund transfer services. The company also provides corporate banking services, such as investment banking, real estate financing, overseas real estate and development project financing, infrastructure and structured financing, equity/venture investments, mergers and acquisitions consulting; securitization and derivatives services comprising securities and derivative products, and foreign exchange trading; business expansion financing and consulting services; and working capital loans and facilities loans. In addition, it is involved in treasury and investment activities in international capital markets consisting of foreign currency-denominated securities trading, foreign exchange trading and services, trade-related financial services, international factoring services, and foreign banking operations. Further, the company offers real estate trust, investment advisory, venture business investment, life and non-life insurance, trust account management, securities brokerage, and asset management services, as well as leasing and equipment financing, savings banking, loan collection and credit reporting, collective investment administration, private equity investment, and financial system development services. Additionally, it provides transaction history inquiries and fund transfers, opening letters of credit, trade finance, payment and collection management, sales and acquisition settlement, business-to-business settlement, sweeping, pooling, ERP interface, host-to-host banking, SWIFT SCORE, and cash and liquidity management service. Shinhan Financial Group Co., Ltd. was founded in 1982 and is headquartered in Seoul, South Korea.